FROZEN FOODS INDUSTRY IN U.S.A

PRODUCT OVERVIEW

Food preservation is as old as humanity, the practice motivated by a surplus of food in the clement seasons and shortages in winter, and also by successful hunting which will produce meat in excess of the amount that can be consumed immediately after the hunt. Preservation by drying, salting, and smoking are ancient practices. Underground storage of vegetables, fruits, and meats is thousands of years old as well. Nine or ten feet underground the temperature is a constant 59 degrees Fahrenheit, not quite refrigerator temperature (35–38 degrees), but still cool.
Ancient man knew to harvest ice in winter and to store it under ground in blocks to bring down the temperature further. Chinese use of iced cellars has been documented back to 1000 BC. If sufficient amounts of ice were stored in winter, some of it will have survived into the warm season to keep stored food cool enough to preserve it.
Humanity living in arctic regions froze fish and preserved it in that manner. This situation changed for the first time in the nineteenth century when, stimulated by Napoleon’s wars, the French invented canning in glass and the British canning in metal. Preservation of food by artificial freezing did not take hold until the 1930s. The art had to be and was discovered as humanity came to an ever better understanding of the behavior of gases. The knowledge discovered could be put to use only because means of using fossil (and later nuclear) fuels were developed into our modern forms of energy.
This essay deals with freezing as a form of food preservation and with the products of that preservation process—frozen fruits, vegetables, seafood, meats, and various prepared food in finished or semi-finished forms (complete dinners being an example of the finished category and frozen doughs an example of the semi-finished category). Ice cream and its relatives (ices and sherbets) are excluded. In this product category the frozen character of the food is its central and, indeed, defining character whereas, in frozen foods, the freezing is a mechanism of preservation only. Preservation, after all, is most successful when it leaves no traces at all. Thus frozen foods are much to be preferred to foods preserved by salting or spices; these preservatives can never be completely removed.
Freezing is effective as preservation because very cold temperatures inhibit or completely stop organic processes that under room temperatures would cause food to spoil. Also excluded from this essay are refrigerated products that do not require freezing; most dairy products belong in this category. Traditionally most dairy products, excluding only cheeses, were consumed shortly after milking the cow or goat had been accomplished. Refrigeration extends the life of these products significantly at much lower temperatures than freezing.

Refrigeration Basics. 

Refrigeration exploits the physical fact that matter responds to changes in temperature by changing phase. We are most familiar with changes of this sort in water. It crystallizes and solidifies in cooler conditions and vaporizes in the presence of heat. When water loses sufficient heat it freezes; when sufficient heat is present, it vaporizes. Our bodies sweat in order to cool off. They do the job by producing water on the surface of the skin; unless humidity in the air is 100 percent, the sweat will evaporate. Evaporation consumes energy and thus cools our skin. When we hold a glass of iced tea in humid weather, we discover that moisture will form on the outside of the glass. Water vapor condenses on the cold surface of the glass. This means that the glass itself has become warmer by taking energy from the vaporized water; and the moisture in the air has liquefied.
The science underlying refrigeration arose in the seventeenth century as part of the development of thermodynamics (heat-power) in which the behavior of gases was intensively studied and relationships between temperature, pressure, and volume were observed. When under pressure gases take up less room and increase in temperature. Most compressed gases absorb heat as they are decompressed by means of a valve at room temperature.
The inventor of modern refrigeration techniques, the German engineer Carl von Linde (1842–1934), is best known for liquefying air in attempts at producing pure oxygen. Linde compressed air and then cooled it by decompression until it liquefied. Linde also produced the first refrigeration system in 1873 by using dimethyl ether as the refrigerant. Later Linde used ammonia gas, still the dominant refrigerant in commercial food freezing processes but not in domestic uses: ammonia is highly toxic. Ammonia is much easier to liquefy by compression than air.
Using two separate spaces, one in which to compress the gas (a heat-producing process), another in which to decompress the gas (a heat-consuming process), enabled Linde to use energy to create cold. The modern refrigerator, using a less toxic refrigerant than ammonia, is an every-day example of this technology. The hot side of the process is on the outside of the refrigerator (at the back) where the refrigerant gas is compressed and is both heated and liquefied in the process. The hot liquid is first cooled in coils exposed to the air of the kitchen and then decompressed through a valve into a system of coils inside the refrigerator, the cold side of the process. As the refrigerant turns back into gas, it cools the coils and passes back to the compressor outside the refrigerator for another pass.
The earliest machines producing artificial cold were used to make ice in breweries which relied on harvested natural ice for cooling. The technology had to develop and spread before freezing as a technique of food preservation became practical. Clarence Birdseye, an American inventor, is credited with launching frozen foods as a category by building and patenting a machine for rapidly freezing food. He operated his own company in the 1923–1928 period before selling his patents to what later became General Foods. General Foods launched the Birds Eye brand in 1930. The company also pioneered the development of the category by development of refrigerated storage equipment for the retail distribution sector. Birds Eye underwent multiple changes in ownership since 1928 but is still present in the market as a leading producer of frozen foods.
Products of a Modern Industry. Frozen food has unique characteristics, be that as a food or as an industry. It is a product of modernity and relies very heavily on an extensive industrial system which, in turn, depends on modern forms of energy. When food freezes slowly, large ice crystals form within it and, in so doing, the crystals rupture cell membranes of fruits, vegetables, and the tissues of meats. When such foods are thawed out for consumption, they lose their accustomed structure. They are softened, mushy, and also taste differently because chemical changes take place as a consequence of crystalline deformations. To avoid this problem, modern frozen food is quickfrozen.
When the freezing takes place rapidly and the freezing temperature is very low (-22 to -40 degrees Fahrenheit) the crystals formed are very tiny and cells are left intact. The thawed food therefore tastes very fresh a very long time after it is rapidly frozen. Quick-freezing is a demanding process, the requirements going well beyond the freezing technology itself.
Fruits and vegetables begin decomposing right after they are harvested. The freezing must begin immediately after harvest. To preserve the original color of fresh fruits or vegetables yet also to remove enzymes that would affect the taste later, food to be frozen must first blanched in boiling water or steam—but very briefly so that vitamins in the fruit are not dissolved in water. Freezing takes place immediately after blanching. Blanching is a complex process with critical timing and temperature. This sort of process requires industrial organization and cannot, in practice, be done well at home. While the frozen food is in storage, it must be kept in deepfreeze compartments, thus at just below zero Fahrenheit. Food must be moved from deepfreeze to deepfreeze in vehicles (or ships) with the same freezer capabilities. Seafood, which is very perishable, is sometimes frozen on board ship after being cleaned and eviscerated.
When viewed in this comprehensive manner, it becomes obvious that frozen food is the product of an extensive system of technology. From the moment an organic product is harvested, seafood is caught, or livestock or poultry is butchered to the moment when the consumer opens a package to let it thaw, the preservation requires the constant operation of precision machinery. This machinery must compress and decompress refrigerants at very frequent intervals while keeping the refrigerants from leaking out. This work, as physicists call it, is accomplished by using fossil or nuclear energy sources. Finally, the cooled compartments must be suitably insulated. The entire system depends upon reliable electric energy so that sustained blackouts due to failures of the electric grid through overload, lack of maintenance, or acts of God can cause food to spoil in significant quantities in a matter of a day or two.

MARKET

Measuring the total market for frozen food in all but years ending in 2 or 7, the years for which full Economic Census data are collected, is difficult because the five industries that make up the total (see Industrial Codes) are reported on by the Census Bureau in full and separately only in those years. In the intervening periods, these industries are rolled up into composite industries for which product detail cannot be extrapolated. At the time of writing the 2007 Economic Census was still being planned. Its results would not be available for another three or four years. Thus the most recent year for which reliable data are available is 2002—and for comparison only data from 1997 are available. Earlier data were reported in different formats.
With these limitations noted, the industry in 2002 had a precisely-measured shipment volume of $31.4 billion, up from $27.3 billion in 1997. This represented an annual compounded growth rate of 2.9 percent, a very energetic rate of growth for a mature industry largely dependent on population growth. Frozen food is a very small percentage of total food manufacturing. All U.S. food shipments in 2002 were $458.2 billion. Frozen foods had a 6.9 percent share of total shipments, up from 6.5 percent five years earlier. Food as a whole grew at annual rate of 1.7 percent. Thus frozen food’s growth was twice as rapid as that of food. To bring these numbers down to the household level, the food industry in 2002 shipped $4.35 worth of food for every man, woman, and child in 2002 each day; and of that total frozen foods were 30 cents per day. Actual expenditures, on average, were higher—these foods had to be transported to stores for sale and increased in price through distributors and retailers.
The market is customarily divided into two large and three smaller segments. Fruits and Vegetables, once the largest category, was second largest in 2002, the leading segment being Frozen Specialties. The smaller segments are Frozen Fish; Frozen Cakes, Pies, and Other Pastries; and Flour Mixes and Doughs.
Changes in volume of shipments between 1997 and 2002 reveal interesting shifts in the public’s consumption preferences. For instance, Fruits and Vegetables declined in shipments. In 1997 the segment was 33.9 percent of industry shipments; by 2002 its share had shrunk to 27.7 percent. Every category within this segment also showed decline in shipments with the sole exception of orange juice and a miscellaneous catch-all category labeled not specified by kind. Another declining segment was Flour Mixes and Doughs. This segment offers refrigerated or frozen prepared doughs and batters, sweetened or not, for products like biscuits, bread, rolls, pizza, cookies, cakes, and the like. The refrigerated category saw increase between 1997 and 2002 but the frozen category, dominant in 1997, declined enough to cause the entire segment to show negative growth.
The entire frozen foods industry grew—and at a nice rate. Where did this growth take place? It was most pronounced in the largest category, Frozen Specialties. This segment is divided into three categories:
1. Frozen dinners and nationality foods (67%).
2. Other frozen specialties (23%), its three largest product lines being frozen soups, whipped topping, and dairy substitutes.
3. Frozen specialty food manufacturing, not specified by kind, a catch-all category (10%) the components of which are undefined.
This last catch-all category more than tripled in volume of shipments in the 1997–2002 period; second in growth was the other category, increasing by 32 percent, and frozen dinners were last in growth, increasing 17 percent. Among categories within these, meat products and sweet products showed growth, dough-based products (including pizza) exhibited decline. The Frozen Specialty Segment as a whole increased its share of the frozen food industry from 34.6 to 39.3 percent, the largest increase within the industry.
In second rank as measured by growth was Frozen Cakes, Pies, and Pastries, a segment that increased from 9.5 to 12.3 percent of total industry shipments between 1997 and 2002. The largest product category within that segment was frozen pastries (41%) and also had the largest increase: it grew by 60 percent in the period. Frozen soft cakes (24.3% of shipments) increased 44 percent; and frozen pies (23.7%) increased by 9 percent in this period.
The largest increase of all was displayed by a category we cannot say much about because the Census Bureau simply calls it frozen bakery products, not specified by kind. This category increased more than three-fold in the period and represented 11 percent of shipments of this segment. Rounding out the growth pattern was Frozen Seafood. This segment increased its share of the frozen food category from 12 to 13.3 percent in this five-year period. The segment is divided into frozen fish (60%) and frozen shellfish (40%). The frozen fish component increased more rapidly, at 37 percent, shellfish at 15 percent in this period.

Foundational Factors. 

Since the end of World War II, a major driving force supporting the growth of the frozen food category has been the high quality of its product, its abolition of seasons in food by providing preservation, and its convenience for a population in which the homemaker has altogether changed her style of life. In the early twenty-first century, and beginning somewhat earlier, the major driving force, however, has shifted to innovation aimed at increasing convenience.
In the entire post-war period women gradually became participants in the labor force without, at the same time, relinquishing (or being able to relinquish) their role as primary managers of households. Women thus created a demand for any and all assistance to cope with chores at home—and their earnings provided the where with all to purchase the conveniences. In 1959, for instance, only 37.1 percent of adult women participated in the labor force, but this rate grew every year thereafter, based on Bureau of Labor Statistics data, for the next forty years, dipping only slightly in two years (1962 and 1991), reaching a peak participation rate of 60 percent in 1999.
Thereafter, however, women’s participation rates have declined, reaching 59.6 percent in 2002 and 59.3 percent in 2005. In the period for which we have good data (1997–2002), a steady state in participation had been reached. The growth in frozen foods, therefore, was supported by innovation answering to changes in life-style that had become well-established earlier. This innovation also serves the food industry’s desire to grow more rapidly with more profitable products.
Innovation in the food industry has focused on creating added value to the consumer, achieved most efficiently by industrializing food preparation. Put in other words, this has meant delivering more and more food in ready-to-eat or ready-to-heat forms, thus taking labor out of the kitchen. Prepared foods in general can be differentiated better, command higher prices, provide higher margins, and thus higher return on investment. Frozen and refrigerated modes of delivery are very important in achieving this end. It is thus not surprising that frozen food has grown faster than food in general and that, within this category, prepared foods have exhibited growth and frozen commodities (fruits, vegetables) have seen decline. Busy households in which both parents work or the woman is the sole head of household create a receptive market for such innovations.

KEY PRODUCERS/MANUFACTURERS

In the frozen foods industry, consumers are much more aware of brand names than of the corporate entities that control them. People recognize such names as Healthy Choice, Swanson, Lean Cuisine, and Weight Watchers but would be hard put to identify these as being the brands respectively of ConAgra, Inc., Pinnacle Foods Corporation, Nestlé USA Inc., or H.J. Heinz Company. In terms of dominant market share in the United States, however, these companies are the leading producers, in the order shown, in frozen specialties, thus in the frozen dinner and entrée markets. Frozen specialties being the leading segment, leaders in it are also key producers in the industry as a whole. All of these companies feature a much wider range of frozen products in addition and are also major producers of non-frozen foods.
A key producer of frozen vegetables and fruits is Birds Eye Foods—the founder of which, Clarence Birdseye, also launched the entire category of frozen foods in the late 1920s. The company became nationally known in 1930 after it was acquired by a company later called General Foods. Philip Morris acquired General Foods in 1983. Philip Morris also acquired Kraft Foods and placed Birds Eye under its management. In 1993 the Birds Eye operation was sold to Dean Foods Vegetable Company which was then, in turn, acquired by Agrilink in 1998.
Agrilink then chose to change its name to Birds Eye Food in recognition of its largest brand. Many other brands in this industry can point back at similar histories as the food industry itself consolidated.
Another important participant in the fruit and vegetable segment is General Mills by way of its Green Giant brand. General Mills is also a leading participant in frozen dough products through its Pillsbury brand. Nestlé’s Stouffer’s line is another major participant in the segment. An additional twenty companies are recognized suppliers of this category as well.
Kraft Food has the dominant market share in frozen pizza distribution through its DiGiorno and Tombstone brands followed by Schwan Food Company (Red Baron, Freschetta, and Tony’s). Kellogg Company, the cereal producer, is the leading manufacturer of frozen waffles. The leading brand of pies, be these pot pies or sweet, is Marie Callender’s, owned by ConAgra. The product line was purchased by ConAgra from Marie Callender’s, a operator of restaurant chains. The company is now called Perkins and Marie Callender’s Inc.
Tyson Foods, Inc. is the leading producer of frozen chicken and specialties. In order of size the three largest producers of frozen red meat products are United Food Group, LLC (Moran brand), Bubba Foods LLC (Bubba Burger), and Philly Gourmet Meat Co. (Philly Gourmet). Leaders in frozen fish include Chicken of the Sea International, Del Monte, and Groton’s.

MATERIALS & SUPPLY CHAIN LOGISTICS

In the logistics of frozen food manufacturing, the product itself, that which is to be preserved, largely defines the location where the freezing must take place. This is as true of fresh fruit and vegetables as of prepared meals or hand-held snacks or of meat products. Freezing itself might be viewed as functionally equivalent to canning, and freezing operations, like canning activities, are integrated into the food production process.
The freezing technology in use is installed permanently with the refrigerant sealed into the system. For operations the site needs energy, a heat source for steam generation (in blanching, for instance), water (for washing the product), freezing equipment, and temporary deepfreeze capacity to hold finished product until it is picked up for shipment. Inputs are the products to be frozen, energy, and water. Where cryogenic freezing is used (see below), the refrigerant itself is a continuously consumed input that must be transported in.
Distinctly different freezing systems in use are designed for different applications. These fall into three categories based on the manner in which the cold temperature is transferred to the product. In air systems the refrigeration equipment cools a stream of air and uses it to freeze the product. In static or air-blast systems the operator keeps a large space at extremely low temperatures and simply exposes the product to this environment, placed on racks, for the time required for hard freezing. No fans move the air. In tunnel freezers labor or machinery moves the product down a tunnel slowly, the tunnel kept at very cold temperature. Fans move the air ensuring that the trolleys carrying product are touched on all sides.
Belt freezers carry the product on a perforated belt with cold air blowing at it from top and bottom. The most effective technique for individually freezing particles are fluid bed systems in which very cold air is blown upward at the product causing it to be suspended in a turbulent air mass continuously swirling and tumbling in the blast. In contact freezing heat is removed from the product by contact directly with the refrigerant itself or with metal plates in contact with the product. Immersion systems are best for loose product, plate freezers or contact belt freezers work well with packaged products. Pressure applied by the plates to the package speeds up the freezing.
Producers use cryogenic systems when very rapid freezing to very low temperatures is desirable or when freezing must be accomplished at unusual and temporary locations. The refrigerant is brought in and thus no equipment is needed at the site. Capital costs are low, operating costs are high—owing to the expense of the refrigerants and their transportation to the site. Liquid nitrogen and liquid carbon dioxide are used in these applications. Fish and berries are sometimes frozen using cryogenic systems. Packaging may take place ahead of or after freezing. Thereafter the product remains in deepfreeze compartments throughout its travels to the consumer’s shopping cart or use in an institutional setting.

DISTRIBUTION CHANNEL

Distribution of frozen foods is identical to food distribution generally. Thus a three-tier distribution is common in which the producer sells to a wholesaler, the latter to the retailer, and the retailer to the customer. The wholesale level, to be sure, may be wholly-owned by the retailer, common in the case of major food chains. The retailer may be a supermarket or a restaurant.

KEY USERS 

Since eating is an unavoidable activity in life—no matter  nbvhow much those on a diet wish this were not the case—everyone is a user of frozen foods. In the industry itself distinctions are made between consumer and institutional markets, thus bulk buyers and individual- and family-portion purchasers. The dominant consumer of prepared meals is the ordinary grocery shopper. Institutional markets, however, are purchasers of bulk shipments of fruits, vegetables, and meat products requiring additional preparation.

ADJACENT MARKETS

Important adjacent markets are represented by dairy products that require a refrigerated environment but not the use of a deep freeze. Ice cream, of course, is the exception. Ice cream is unique in being, as already noted, the only frozen product intended to be consumed in frozen form. A close relative of ice cream is ice itself, simply frozen water, produced and sold exactly like frozen food but used by the buyer for either temporary cooling of beverages in coolers and/or consumption in the beverage itself.
Adjacent to frozen foods is the full range of dried foods. By removing all water from a product, producers of various dried beverage or soup mixes achieve preservation by removing the indispensable ingredient of life—and also of decay—from the product and sealing out all moisture by packaging. These products are then reconstituted by adding water. Freeze-dried products are an interesting hybrid between the two in that freezing, combined with desiccation, produce a very stable product. It was once thought that freeze-drying would replace most other forms of preservation, but the process has seen major application only in the distribution of coffee.
The largest and most dominant market adjacent to frozen food is canned food, dwarfing the former in sheer volume sold, particularly in fruits and vegetables, but also in seafood and in certain categories of prepared foods like soups and stews.

RESEARCH & DEVELOPMENT

Research & development efforts in this industry are concentrated chiefly on new product development in efforts to penetrate the prepared food segment deeper and deeper with frozen specialties aimed both at meal-time products and quick snacks. Increasingly, as the twenty-first century unfolds, this has taken the form of cooperative research involving the producers of the chief tool consumers use to restore frozen food to appropriate temperatures—the microwave oven—itself a category of product in active development.
Complex frozen meals in which different components require different degrees of heating present problems that technology can overcome. Restoring vegetables on a combined dish to a crisp taste while heating a relatively thick cut of breaded veal through and through cannot be accomplished effectively in the same time and at the same temperature. Enter smart packaging and highly educated microwave ovens. Developments are aimed at producing packaging that a microwave oven is capable of reading in order to program itself to cook the contents of the package just right. This involves targeting heat at different areas of the package for longer or shorter times. Similar issues are involved in creating crisp french fries from frozen fries.

CURRENT TRENDS

The most notable trends touching the frozen foods industry are changes in lifestyle in which the traditional family meal is seemingly disappearing, replaced by a combination of continuous snacking, fast food purchasing, grabbing a meal, and members of a family eating separately as their schedules permit. A counter trend is represented by gourmet food preparation as a hobby or avocation practiced to amaze and to entertain close friends.
Parallel with these trends, a portion of the population is at least professing an interest in healthy eating marked by avoidance of fats, carbohydrates, sugar, and products saturated with bad cholesterol. The frozen food industry is responding to each of these fashions. The industry attempts to provide the experience of a meal but without any of the necessary preparations, planning, and labor. Its leading products are all manner of handheld snacks. It supplies difficult-to-get ingredients for the gourmet chef as well as healthy breakfast foods for children that require minimum time (or skill) to prepare.

TARGET MARKETS & SEGMENTATION

The industry has well-defined segments. These have emerged over time and have developed into the very divisions of the industry as illustrated by segment names: fruits and vegetables; frozen specialties; fish and seafood; cakes, pies, and pastries; and flour and dough products. The first of these segments represents utility, the fruits and vegetables having a fresher character than their canned counterparts but requiring additional work.
Frozen fish and seafood represent safety over fresh-bought goods. Frozen specialties on the one hand and frozen sweets on the other hand cater to the consumers’ demand for luxury at great convenience; flour and dough products represent a segment offering the consumer both the convenience of avoiding the more arduous aspects of baking, namely dough preparation, while preserving the pleasure of producing something fresh by leaving the baking and the optional decorating function to the consumer.

In the book 'Encyclopedia of Industries and Products- Manufacturing', edited by Patricia J. Bungert & Arsen J. Darnay, Gale Cengage Lerning, New York-London, 2008, 2 v. p.437-443, 1st. volume. Edited and adapted to be posted by Leopoldo Costa.